stop High Yielding Retail & Leisure Investment Opportunity - Singer Vielle Sales

High Yielding Retail & Leisure Investment

44-46 Church Street | Blackpool  | FY1 1HP

£630,000

subject to contract

SOLD

Summary

  • Freehold retail & leisure investment

  • Prominent position in town centre pitch

  • Over 90% of income secured against Costa Limited

  • Pre-Tax Profits £127m, Shareholders’ Funds £450m

  • No VAT payable

  • £630,000, subject to contract

  • 8.3% Net Initial Yield

Location

Blackpool is a popular seaside resort and one of the most well-known tourist destinations in the United Kingdom. Its various attractions such as Blackpool Tower, Blackpool Pleasure Beach, Blackpool Illuminations and Winter Gardens draw millions of visitors per year. The town is located approximately 80 km (50 miles) north-west of Manchester, 88 km (55 miles) north of Liverpool and 26 km (16 miles) west of Preston.

The town benefits from good road communications being served by the M55 Motorway which in turn links with Junction 32 of the M6 Motorway some 24 km (15 miles) to the east.

Blackpool is also well connected to the national railway network with a fastest journey time to London Euston of 2 hours 45 minutes. Hourly services connect Blackpool South station to East Lancashire and there are also direct services to Blackpool North from Manchester International Airport, Manchester Piccadilly, Manchester Victoria, Liverpool Lime Street and York.

Blackpool is within easy reach of a number of ferry ports covering crossings from Ireland, Isle of Man and the Netherlands. Blackpool Airport provides regular flights to the Isle of Man, Belfast and Dublin.

Situation

The property is situated in a highly prominent retailing pitch on the pedestrianised Church Street, at its junction with Corporation Street, in the heart of Blackpool town centre. Surrounding occupiers include Marks & Spencer, Nando’s, Carphone Warehouse, Santander, Greggs and Bella Italia.

The Grand Theatre Blackpool is immediately opposite and the Houndshill Shopping Centre is directly to the south. The Centre totals approximately 27,685 sq m (298,000 sq ft) and comprises 70 retail stores and 800 car parking spaces. Occupiers include Primark, Debenhams, Next, Boots, New Look, River Island and H&M. In addition, Winter Gardens Blackpool, one of the UK’s largest theatres, is within a few hundred yards of the subject property on Church Street.

Description

The property comprises a ground floor unit, which has been recently fitted out by Costa Coffee in their new corporate style.

The first and second floors have been fitted out for leisure use as a physical adventure game centre.

We understand the property is locally listed and located within the Blackpool Town Centre Conservation Area.

 

Rateable Value

We understand that the Rateable Value for the property is £80,000, according to the Valuation Office Agency's 2017 draft valuation.

The Uniform Business Rate is 48 pence per pound for 2015/2016.

Accommodation

The property has been measured by BKR Floor Plans and provides the following Net Internal Areas;

Net Frontage (Church Street) 13.87 m 45.5 ft
Net Frontage (Corporation Street) 22.25 m 73 ft
Ground Floor Zone A 73.95 sq m 796 sq ft
  Zone B 82.59 sq m 889 sq ft
  Zone C 74.51 sq m 802 sq ft
  Zone D 10.40 sq m 112 sq ft
  Total Sales 241.45 sq m 2,599 sq ft
  ITZA   1,455
First Floor   213.21 sq m 2,295 sq ft
Second Floor   171.49 sq m 1,846 sq ft
       
Total   626.15 sq m 6,740 sq ft


A set of floor plans is available to download and the measured survey report can be re-addressed to a purchaser.

Tenure

Freehold.

Tenancies

The ground floor is let to Costa Limited on a full repairing and insuring lease for a term of 10 years from 1st June 2015, expiring on 31st May 2025. There is a tenant’s break option on 1st June 2021, subject to six months’ prior notice. The current passing rent is £50,000 per annum which we calculate equates to £34.36 Zone A. The lease benefits from an upwards only rent review on 1st June 2020.

The permitted use is as a retail coffee shop within Class A1 and/or A3 of the Town and Country Planning (Use Classes) Order 1987.

The first and second floor is let to Escape Room Centre Limited, guaranteed by Premier Cabs (Blackpool) Limited on a full repairing and insuring lease for a term of 10 years from 2nd August 2016, expiring on 1st August 2026. There is a mutual break option on 2nd August 2021, subject to three months’ prior written notice. The lease benefits from the following stepped rents:

2nd August 2016 to 1st August 2017 £5,000 per annum
2nd August 2017 to 1st August 2018 £6,000 per annum
2nd August 2018 to 1st August 2021 £7,000 per annum
2nd August 2021 to 1st August 2026 £9,500 per annum


The permitted use is as team building activities and associated activities entertainment and games within Class D2 of the Town and Country Planning (Use Classes) Order 1987. The lease is outside 1954 Act protection.

Therefore, an investor will benefit from a total initial income of £55,000 per annum.

Covenant

Costa was founded in 1971 and is now the largest and fastest growing coffee chain in the UK, currently with over 1,900 coffee shops in the UK, over 1,100 stores in 29 international markets and over 4,200 Costa Express self-serve units. Costa created 1,900 new UK jobs during the last financial year and opened 176 net new UK stores. The Costa Coffee Club has around 2.5 million active card holders.

Costa Limited (Co. No. 1270695) has reported the following figures:

  26th February 2015 26th February 2014
Turnover £735,974,000 £633,427,000
Pre- Tax Profits £127,221,000 £130,449,000
Shareholders’ Funds £449,549,000 £351,333,000


Since 2007/08 Costa has grown its total system sales from £0.3 billion to £1.4 billion and aims to grow this to around £2.5 billion by 2020.

The ultimate parent undertaking is Whitbread PLC, the UK’s largest hotel, restaurant and coffee shop operator with 45,000 employees. It is one of the UK’s most successful FTSE 100 companies. For the year ending 26th February 2015 the company reported:

Total Revenue £2,608.1 million
Pre-Tax Profits £463.8 million
Net Assets £1,977.9 million


For more details go to www.costa.co.uk and www.whitbread.co.uk.

Escape Room Centre Limited (Co. No. 10153990) is a newly formed company incorporated on 28th April 2016. Therefore, no company accounts have been published yet. For the year ending 30th June 2015 the guarantor, Premier Cabs (Blackpool) Limited (Co. No. 02941228) reported Shareholders’ Funds of £742,503.

Escape Room Centre is a physical adventure game whereby participants are locked in a room and have to use elements of the room to find clues, solve a series of puzzles and break codes in order to escape within a set time limit. The games cater for everyone from friends and family to work and corporate team building. We understand the tenant has a second Escape Rooms Centre on the outskirts of Blackpool town centre. For further information visit www.escaperoomcentre.com.

Value Added Tax

The property has not been registered for VAT.

Proposal

We are instructed to seek offers in the region of £630,000 (Six Hundred and Thirty Thousand Pounds), subject to contract, reflecting a net initial yield of 8.3%, assuming purchaser’s costs of 5.13%.

Investment Considerations

  1. An opportunity to acquire a freehold retail & leisure investment;

  2. The property occupies a prominent retailing position in the heart of Blackpool town centre;

  3. The investment provides very secure income with over 90% of the income secured against Costa Limited; Pre-Tax Profits £127m, Shareholders’ Funds £449.5m;

  4. No VAT payable;

  5. A purchase at the asking price will provide an investor with an attractive net initial yield;

Contact us

Singer Vielle   +44 (0) 207 935 7200
Neil Singer neil@singervielle.co.uk +44 (0) 203 478 9120
Dale Henry dale@singervielle.co.uk +44 (0) 203 701 1356
Richard Wolfryd richard@singervielle.co.uk +44 (0) 203 701 1353
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Vendor's Solicitor

DWF LLP  
Miles Sinclair miles.sinclair@dwf.law +44 (0)161 603 5397
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